Amazon may have mastered the art of ruthlessly gaining market share in a myriad of retail markets and figured out how to dominate the high tech world in the fast-growing market for cloud computing. The company’s Prime Video service, however, remains very much a work in progress.

As Michael Nathanson of MoffettNathanson noted in a recent note to clients, a survey of 1,300 viewers in the “core streamer demographic” of 18- to 34-year-olds found many found the content lacking in quality and were disappointed by the service’s skimpy library compared with its peers. Roughly 85% of Amazon Prime Video users also consume video through
Netflix. Nathanson also found that the service was “important” to 40% of Amazon Prime members, about half of the 78% that cited free two-day shipping as their prime motivator.

“While Amazon won multiple Emmy awards for Transparent, we would argue that Amazon, up to this point, has not lived up to the hype and promise of category disruption,” Nathanson wrote. “In our conversations with industry contacts, much of that blame was placed on Amazon’s creative leadership in Hollywood.”

Earlier this year, the Seattle-based company overhauled the management of Amazon Studios after the ouster of Ray Price in the wake of a sexual harassment scandal. Two key Price deputies, Conrad Riggs, who lead Amazon’s unscripted content, and Joe Lewis, who oversaw scripted content, left in the wake of Price’s departure. Under the leadership of Price’s successor, Former NBC executive Jen Salke, Amazon has taken some interesting risks.

Amazon has signed high-profile deals with Law & Order creator Dick Wolf, Actor/Director Jordan Peele, who won the Best Original Screenplay Oscar this year for the horror film Get Out, among others. She greenlighted three young adult pilots, hoping to tap into an underserved market and has high hopes for a big-budget adaption of The Lord of the Rings trilogy.

I also wanted to plug another Amazon show, The Marvelous Mrs. Maisel, which tells the story of a young female stand-up comic trying to make a name for herself in the New York City of the early 1960s. Maisel was created by Amy Sherman-Palladino, best known for The Gilmore Girls. Maisel has been nominated for a boatload of Emmys including the best lead actress in a comedy series (Rachel Brosnahan), best directing for a comedy series and best writing for a comedy series (both Amy Sherman-Palladino).

“To us, Amazon Prime Video has both content and marketing problems,” Nathanson says. “Of the Prime members surveyed who reportedly do NOT use the Amazon Video service, 37% said that their content needs are met by Netflix, Hulu, and other channels while 19% reported that they are not interested in the content on Amazon Video. As for awareness, 22% of the respondents said they didn’t know enough about the content on Amazon Prime Video.”

There are two ways that Amazon can address the problems at Amazon Prime Video. The “easy” solution would involve the Seattle-based company buying a smaller media company that has an extensive library and an established brand like
CBS. However, as Nathanson notes, an Amazon-CBS deal isn’t likely going to happen soon under the Tiffany Network’s current ownership structure where the company and its corporate sibling are both controlled by the family of media mogul Sumner Redstone.

Option “B” for Amazon involves the company building out its video content little by little. That option, of course, would take years but one thing that is clear from Amazon’s history is that it has all the patience in the world if they see a big pay off on the horizon as is the case with Amazon Prime Video. However, Google, Facebook, and Apple each have tens of billions at their disposal to develop original content for their nascent businesses in this sector.